About MSP
- MSP is the minimum price set by the Government at which farmers can expect to sell their produce for the season. When market prices fall below the announced MSPs, procurement agencies step in to procure the crop and ‘support’ the prices.
- The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
For determining the MSP CACP takes into account the following factors:-
- Cost of production.
- Changes in input prices.
- Input-output price parity.
- Trends in market prices.
- Demand and supply.
- Inter-crop price parity.
- Effect on the industrial cost structure.
- Effect on the cost of living.
- Effect on the general price level.
- International price situation.
- Parity between prices paid and prices received by the farmers.
- Effect on issue prices and implications for subsidy.
Comments
write a comment